Independent Trustees release advice on identifying statutory employers
Jan 27An Independent Trustee firm has recently released some useful advice for identifying statutory employers. This article is a summary of the original guide. The Pensions Regulator has recently emphasised how crucial it is that trust members identify their statutory employer. Because of the way legislation is designed to mitigate against the losses of the pensions crisis, trust funds need to qualify for assistance both from the Pensions Protection Fund compensatory scheme, and the Financial Assistance Scheme. To do this they first need to identify their statutory employer. Trusts which have come to exist without a statutory employer fall subject to a current government consultation which would extend compensation cover those schemes which came to be deprived of a statutory employer prior to June 2011.
As soon as you are dealing with anything other than a fund which is still enjoying open accrual, deciding which path leads to the statutory employer is a complex process. Often the scheme in question will be closed to accrual. Further to this there will often be a number of employers involved, all of whom will have statutory obligations as corporate trustees. The Regulator now requires a declaration as to who are the statutory employers of the scheme, on any return form filled out. This has been a requirement since November 2011. The burden is on trustees, including the independent trustee or corporate trustee to elucidate the trust instrument for the benefit of the members of the scheme.
It often happens that the current employer or corporate trustee administering the scheme of which you are a member is not the statutory employer. So how should you go about identifying your statutory employer? The first step must be to consult with your trustees, as applies, in order to request the relevant scheme documentation which indicates how the trust instrument was constructed. Failing this, HMRC Pension Scheme Services keep up-to-date and complete records of employers who have been allocated ECON numbers. The significance of this is that all employers with an ECON number will all be statutory employers for the purposes of identifying the relevant trustee. Of course, Companies House is another useful resource, as are any accountants who may have worked on funding positions when an employer dropped out of the scheme. This would include documentation showing whether section 75 deficits were discharged at the time. It is usually worth considering seeking professional advice from a legal practitioner experienced in the area if these avenues turn up nothing significant.
The likely difficulties members will encounter will be keeping pace with the situation of the scheme as corporate trustees are replaced over time.